1. Field of the Invention
This invention generally relates to methods and systems for managing multiple projects. In a preferred embodiment, the invention relates to a method and system for planning and managing multiple projects on demand. More specifically, this preferred embodiment provides a new technique for coordinating multiple projects and the resources required to perform them when those resource requirements vary substantially across projects.
2. Background Art
Diverse projects are common in large technical and professional services businesses, such as information technology management, business process outsourcing, and consulting, because such services are highly customized to individual customer requirements. But diverse projects can occur even in standardized services and product-based businesses, such as manufacturing and distribution, if a firm has multiple lines of business or multiple product lines. And diverse projects can occur within a program, which is a set of related projects that achieve more when managed together.
Critical Chain Project Management
The Critical Chain (CC) project management method was originally a method for planning and managing an individual project [Critical Chain by Eliyahu Goldratt, North River Press, 1997]. Though controversial, CC can overcome weaknesses inherent in the older yet more-widely used Critical Path (CP) project management method. Table I below shows similarities and differences between Critical Path and Critical Chain project management methods.
TABLE ICritical Path (CP)Critical Chain (CC)Tasks are estimated with . . .90% confidence50% confidenceContingency time is planned . . .in every taskonly around thecritical chainResource contention is . . .often ignoredmanagedResource leveling affects . . .non-critical tasksall tasksWork rules allow . . .bad multi-taskingno bad multi-taskingPlanned duration is usually . . .greater than CCless than CPEarly starts on gating tasksencourageddiscouragedare . . .Late task completions . . .accumulatedo not accumulateRe-planning is done . . .frequentlyrarelyProgress is tracked against . . .milestonestime bufferpenetrationLate project completionoftenseldomoccurs . . .
Overall, if CC principles are followed faithfully, CC projects are likely to finish earlier than CP projects of equivalent scope because CC eliminates unnecessary contingency from task estimates, actively manages resource contention, and applies work rules that substantially decrease the probability of late project completion. For instance, bad multi-tasking (assigning a resource to more tasks than can be completed in a given time) is common in CP, but prohibited in CC. Furthermore, if multiple projects are staggered (without resource contention) rather than concurrent (with resource contention), some of those projects will be completed much earlier with CC management than with CP management.
Multi-Project Critical Chain
CC has been extended for planning and managing multiple projects via a technique that schedules projects based on the limited availability of the Strategic Resource (SR) [Project Management in the Fast Lane by Robert Newbold, St. Lucie Press, 1998; Critical Chain Project Management by Lawrence Leach, Artech House, 2000]. The SR is often (1) chronically in short supply, (2) not readily available from outside sources, and (3) slow to develop internally. If not, one resource is designated as the SR and deliberately understaffed to ensure that the constraint does not shift to another resource type. The SR is also known as the “Drum Resource” because it sets the pace for all projects. That is, projects are scheduled (staggered) by creating inter-project dependencies between tasks performed by the SR on various projects. For instance, if Information Technology Architects are the SR because there are not enough to staff all available projects, multiple projects are scheduled according to this technique so that IT Architects can progress from project to project with minimal delay. Effective use of this technique, however, requires that (1) the SR is known, (2) all other resource types have enough spare capacity so that they rarely if ever become the constraint and thereby cause the SR to become idle, and (3) project sponsors are willing to wait for their project to start based on SR availability.
Unfortunately, requirement #1 is quite difficult to satisfy as project diversity increases, and project diversity is often highest when projects are performed for outside clients rather than internal groups. There simply may be no single SR type, across a portfolio of diverse projects, and if so, this technique cannot be effectively applied to the entire portfolio. In such circumstances, it may be possible to identify the SR that applies within a class of projects, and schedule each class accordingly. But this does not address resource contention between project classes. So the tendency is to revert to scheduling each project independently, even though they compete for resources, which in turn contributes to cross-project multi-tasking and the other undesirable effects that multi-project CC was designed to eliminate.
Requirement #2 is likewise difficult to satisfy if all resource types are managed toward maximum utilization. A central tenet of CC is that both project and enterprise productivity are maximized when non-strategic resources have some spare capacity—even though this may seem counter-intuitive. With education, it is possible to get workers, managers, and executives to buy into lower utilization targets for non-strategic resources. But like requirement #1, this presumes that a common SR exists across projects, which may not be the case, as shown earlier. Furthermore, the SR technique lacks algorithms or heuristics for computing spare capacity needs for non-strategic resources, which makes education and buy-in difficult.
Finally, requirement #3 is impossible to satisfy whenever approval for a project depends on the ability to start it on demand. If a project start is delayed, project sponsors generally assume that project completion will be delayed by at least as much. With CC, this is not necessarily the case because project durations can be significantly shorter, thereby more than making up the delay relative to the equivalent CP-managed project duration. Nevertheless, project sponsors tend to perceive delayed starts as being unresponsive to their needs, which generally works against project approval. Ironically, on large, complex projects, the project executive (PE) may be the constraint because he/she has customer relationship responsibility in addition to project/program oversight. But the conventional SR approach does not address this possibility because (1) the PE performs no tasks on the CC and (2) availability of a suitable PE typically constrains only the start of the project/program, not the duration of any tasks.
Projects On Demand
The SR approach is based on the assumptions that (1) an organization's resource capacity is essentially fixed, and (2) the challenge is to prioritize, plan, and manage projects in a manner that uses that fixed capacity to complete the projects that create the most value. Fixed capacity is a reasonable assumption for many organizations, particularly those performing internal projects, but there are organizations whose resource capacity is relatively variable and within which it may be impossible to unbalance capacity toward a common SR.
For example, global service providers, who are in the business of performing projects for others, do not operate with fixed capacity. They have relatively elastic resource capacity, except in the short run, via subcontractors, business partners, acquisitions, and employees, including those rebadged from their previous employer as part of an outsourcing contract. Some global service providers complete thousands of projects annually and use over 100,000 resources from various sources. Beyond the short run, however, the constraint for global service providers is external, in the market for their services, rather than in their resources.
Customers of such enterprises want projects completed on demand rather than when their projects fit the service provider's schedule. Clearly then, there is need for a multi-project planning and management technique that allows CC to be used when the requirements for the SR technique cannot be met—and would not be appropriate if they could.